A fundamental shift in the global manufacturing sector from a labor intensive market to an information intensive market is occurring for a variety of reasons. For example, in the past, businesses have placed their manufacturing facilities in developing countries with extensive labor pools. However, as these countries begin to industrialize, the cost of labor increases and, therefore, the cost of manufacturing increases. In order to control the cost of manufacturing, the businesses are forced to lower the cost of production in the current location or move to a new location. As the list of stable developing countries begins to shrink, the moving of manufacturing locations to such countries becomes less attractive. The cost of moving, building a new facility and training new workers, along with the political uncertainty in a large number of developing nations having an available labor pool, militates towards increasing productivity and lowering costs at existing facilities or building new facilities where the labor costs are high (e.g., United States, Japan, Germany, etc), but the labor pool is skilled and the political environment is stable.
Thus, companies must utilize technology to cut costs and improve efficiency in order to remain competitive. Information intensive programs such as just-in-time (JIT) inventory and total quality manufacturing have allowed for such cost cutting and efficiency improvements in many facilities. However, as the global manufacturing market becomes more competitive, new ideas for using information are needed to continue to fuel efficiency improvements in the manufacturing sector.